Revista Drummond | Issue 06 | September 2016

September 2016/ Issue 06

REVISTA

12 Coal Wetting, a Mechanism to Protect the Environment 14 We Support a Tremendous Operation

REVISTA DRUMMOND

18 A Place where Children Learn Through Play

We Work in Harmony with

Human Rights

Content DIRECTOR josé Miguel Linares EDITORIAL BOARD Alfredo Araújo Amílcar Valencia Diana Tabares Enrique Álvarez Margarita Saade Pablo Urrutia Paulo González Hillary Drummond Carolina Riaño EDITORIAL Assistance Mediática Comunicaciones PHOTOS Gatos Gemelos Comunicación Comunicaciones Drummond Ltd. Colombia

3. EDITORIAL Together We are Building a Better Country 4. MAIN TOPIC We Work in Harmony with Human Rights 7. INFOGRAPHIC This is How we Protect Human Rights CURRENT NEWS 8. We Reached a Comprehensive Agreement with Our Unions 10. Regional Autonomous and Sustainable Development Corporations Visited the Pribbenow Mine IN OUR OPERATION 12. Coal Wetting, a Mechanism to Protect the Environment 14. We Support a Tremendous Operation 16. Myths and Realities of Hydraulic Stimulation

DRAFTING, EDITING AND PUBLISHING Gatos Gemelos Comunicación

17. IN BRIEF

Revista Drummond is a publication edited

by Drummond Ltd. Colombia.

18. CSR A Place where Children Learn Through Play 20. SPECIAL 10K We Sponsored the Sporting Spirit of the Santa Marta 10K

The opinions in the articles reflect only the view of the authors. Any full or partial reproduction of the editorial and graphic material published here without the express permission from the authors is prohibited.

21. OUR TALENT Dreams that Only Come True Through Opportunity 22. Occupational Health and Industrial Safety Operational Excellence in Our Working Conditions

04 2

www.drummondltd.com

12

Together We are Building a Better Country

S

ince the beginning of our operations in Colombia, respect, tolerance and teamwork have been values that have characterized us as a company and have allowed us to work together to achieve all of the goals that we have set for ourselves.

These principles, were the basis for the recent collective bargaining agreements between the company and four of its five unions. Through constructive dialogue, we reached a comprehensive agreement that will bring great benefits for our human talent, the company and the country.

I would like to take this opportunity to express my sincere gratitude to the negotiating committees, both from the unions and the company. Thanks to their hard work and goodwill, we completed this process successfully, growing stronger as a team.

I would also like to extend my thanks to the company’s support area, which for years has ensured the wellbeing of our workers through high-quality services, including the food services and lodging at the Mine and the Port. This area is part of a series of policies and benefits designed to promote the health, safety and personal and professional development of our employees.

The cabin improvement program, implemented in 2012, is also part of these policies and has allowed us to contribute to the health of our employees by reducing their exposure to noise, particulate matter and whole body vibration in the cabins of mobile and stationary equipment, as explained later on in this issue.

In addition, Drummond has demonstrated to be a defender of human rights, and therefore has been involved in various initiatives aimed at fostering the National Action Plan on Human Rights and Business, whose first edition was published by the National Government late last year.

JosĂŠ Miguel Linares, President

We also actively promote these rights through our Corporate Social Responsibility programs, notably the work done in the Child Development Centers in the departments of Cesar and Magdalena. Through this initiative, the company has contributed to the overall growth during early childhood and, therefore, is strengthening the social fabric of the communities in its areas of influence.

At the same time, the company is constantly working on projects that contribute to mitigating its environmental impacts.

One of the projects reduces emissions of particulate matter generated by the operations by wetting and compacting coal in rail cars.

Drummond shares and involves its stakeholders in its environmental commitment. For this reason, it recently received a visit from the Association of Regional Autonomous and Sustainable Development Corporations, during which it discussed the coal extraction and production process, and the forestry compensation projects. This visit strengthened our ties and is an encouragement for us to continue with our goal of producing sustainable coal.

I invite you to enjoy this issue and learn, firsthand, how our team encourages the construction of a better Colombia.

www.drummondltd.com

3

Main Topic

We Work in Harmony with

Human Rights

The cornerstone of Drummond’s operations in Colombia is promoting national progress, peace and respect for human rights.

S

ince it arrived in Colombia, Drummond Ltd. has been committed to the welfare of its workers, the communities in the area of influence of our project and, above all, to the country’s development. It has shown through its social and environmental programs, which are in line with the current legislation, the commitment to sustainability and a deep respect for human rights.

This respect and commitment, in addition to the recommendation issued by the first assessment of the company’s internal processes completed by Bettercoal, motivated Drummond to incorporate the Voluntary Principles on Security and Human Rights as part of its corporate policies in 2014.

4

www.drummondltd.com

These Voluntary Principles were born as an initiative by the governments of the United States and the United Kingdom—along with companies in the extractive and energy sectors around the world, and some nongovernmental organizations. They serve as a guide to maintain the security of the operations, within a framework that ensures respect for human rights and fundamental freedoms based on three pillars: risk assessment, relations with public security and relations with private security.

To raise awareness throughout the company regarding the significance and responsibilities involved in abiding by these principles, Drummond Ltd., along with the consulting firm Ardura, began a training process that has involved each of its workers.

Since the issue of human rights is so broad and covers so many dimensions, during the awarenessraising process, Drummond recognized that, in order to strengthen the company’s policy on the topic, it needed to include another element: adhering to the United Nation’s Guiding Principles on Business and Human Rights (UNGPs). The document has 31 principles that specify the international standards that companies and governments must follow to protect, respect, remedy and enforce these human rights.

In mid-2015, the company, along with the Presidential Council for Human Rights, the Ministry of Mines and Energy, the National

Mining Agency and other companies in the sector, received an invitation from the National Government to form a working group to prepare the “Pilot for Best Practices on Human Rights with Coal Producing Companies Located in Cesar and La Guajira.” An initiative aimed at providing information for the National Action Plan on Human Rights and Business.

This Pilot seeks to identify replicable lessons and opportunities for improvement in the implementation of principles and guidelines on human rights, based on the experience of the participating companies and the local and national authorities, and their relationships with the communities in the areas of influence where they carry out their operations.

“Working within the framework of a human rights policy is crucial for any organization, given that it is the most important license to build a successful operation.”

The first steps of the initiative were included in the first version of the National Action Plan on Human Rights and Business, published by the government at the end of 2015. The working group agreed to work on specific tasks to be carried out during 2016, including facilitating dialogue with stakeholders and encouraging participation in the project.

Pablo Urrutia, Vice President of Communications and Public Relations for Drummond Ltd., expressed that “working within the framework of a human rights policy is crucial for any organization, given that it is the most important license to build a successful operation, which ensures and contributes to a sustainable development.”

www.drummondltd.com

5

Main Topic Our Responsible Management of Human Rights The protection of human rights, both inside and outside the company, is based on Drummond Ltd.’s commitment to its employees, communities in the areas of influence and the environment.

This task is carried out by the company through its social responsibility programs.

Many of our corporate social responsibility activities have provided the means to meet the most basic human rights in our area of influence.

For example, through our Good Neighbor policy, Drummond has improved the quality of life of its communities of influence through job creation and purchasing goods and services from local and regional suppliers. Additionally, it has helped to improve infrastructure for schools, hospitals and roads, provided funding for job training centers, granted university scholarships and sponsored training for employees to prepare development plans that benefit, wherever possible, all residents of the region.

These initiatives are an addition to the Environmental Management Plans and the Compensation Program, through which the company has contributed to recovering the ecosystems in its operating areas, and it has promoted the work of the farmers in the Serranía del Perijá to develop sustainable incomeproducing programs, as well as reforestation activities, with the support of the Pro Sierra Nevada de Santa Marta Foundation.

Within the company, Drummond’s commitment to its employees means providing them with a better quality of life through a variety of benefits at the personal, family and professional levels.

Additionally, Drummond defends and promotes the right of association enshrined in the Constitution. Currently, the company has five unions that cover close to 62% of the labor force.

Meanwhile, collective bargaining agreements with these unions cover up to 73% of all workers.

Malicious Accusations All of this work, as part of the company’s protection and respect for human rights, completely refutes the accusations made by some non-governmental organizations that argue that there are alleged ties between the company and groups outside the law. This is the case of the Dutch nongovernmental organization PAX, which asked European energy companies to stop doing business with Drummond Ltd.

This situation led Drummond to demand that the organization retract its allegations and urge it to communicate this to the European energy companies, since it has been proven in the Colombian and U.S. judicial systems that these claims are unfounded and based on false testimony.

“Through the Plan, we seek to overcome historical mistrust regarding the defense of human rights.

Therefore, the absolute willingness of business owners and social and union organizations to promote respect for the rights of ethnic groups, women, children, adolescents, the LGBTI population, people with disabilities, labor movements and other minority groups is essential.”

National Action Plan on Human Rights and Business.

6

www.drummondltd.com

Our Guidelines

This is How we Protect Human Rights The commitment to our stakeholders goes beyond complying with the law and seeks, on an ongoing basis, to contribute to the sustainable economic and social development of the country. For this reason, protecting the rights of the people and the surroundings with which the company’s organization interacts is the cornerstone of all of our activities.

To do so, we have a corporate policy that defines the responsibilities that we have as an organization on this issue, and we have adopted various national and international standards that guide and verify our actions.

1

2 United Nations Guiding Principles on Business and Human Rights (United Nations “protect, respect and remedy” framework)

These principles are based on the recognition of:

Child labor or exploitation

Corporate Policy Our company does not accept any form of violation of human rights or disregard for the laws that protect them.

Therefore, the following are expressly prohibited:

Violation of the freedom of association and collective bargaining

Infographic

States’ existing obligations to respect, protect and fulfill human rights and fundamental freedoms The role of business enterprises as specialized organs of society performing specialized functions, required to comply with all applicable laws and to respect human rights The need for rights and obligations to be matched to appropriate and effective remedies when breached to be able to implement non-judicial remedial measures

Forced labor Discrimination of any kind Concealing or being complicit in acts that violate human rights

3 Assessing the operation’s risks in terms of security issues, the potential for violence, human rights records, responsibility and the rule of law, conflict analysis and its guidelines for equipment transfers.

Voluntary Principles on Security and Human Rights These guidelines are classified and managed according to three strategic aims:

Verifying the relationships between the companies and public security in terms of its security arrangements, efficacy of the law to protect against threats to human rights, discussion and planning meetings and responses to human rights complaints.

Reviewing the interactions between companies and private security to establish the best management practices to guarantee high ethical, technical and professional standards and minimize possible abuses of authority by the providers of these services.

www.drummondltd.com

7

Current News

We Reached a Comprehensive

Agreement with Our Unions On May 14th and 15th, Drummond Ltd. signed the collective bargaining agreements that will govern employee contracts for the next 3 years. These agreements will bring great benefits to our employees, the company and the country. They will allow us to continue to work together to overcome this difficult period for the international coal market.

T

he collective bargaining agreements that were signed represent a comprehensive solution for employees and for the company. They cover the main concerns that were raised during negotiations, which took place during April and May of this year.

Four of the five trade unions that exist at the company participated in this process: Sintramienergetica, which covers 40% of all workers; Sintradrummond, covering 20%; Sintramineros, which has 4%, and Agretritrenes, which includes 2%.

Sintradem, meanwhile, decided not to participate in the negotiations and to continue with arbitration proceedings that began in 2014, due

8

www.drummondltd.com

to the submission, negotiation and failure to agree on a list of demands. This association includes 2% of the total workforce.

How Did We Do It? Drummond Ltd. and the union organizations met at the Hotel Zuana in Santa Marta, without intermediaries and under the principles of respect, willingness to listen, transparency and tolerance.

The unions’ negotiating commission was chosen by their members and was supported by advisors, while the company’s committee was composed of the following four employees:

•

Ricardo Urbina Aroca, Vice President of Human Resources

•

Ricardo Barros Pavajeau, Labor Relations Manager

•

Luis Cabello Mugno, Director of Human Resources – Mining Operations.

•

Adriana Isaza Gómez, Director of Human Resources – Transportation Operations

After some offers and counteroffers, the negotiating committees reached an agreement that includes truly significant benefits for workers in terms of wages, healthcare and education, among others.

These benefits are the same for all unions, as the company made the same offer to all of them, maintaining equity among all workers benefitting from the collective bargaining agreements.

However, the union leave, assistance and other benefits directed at the union organizations were agreed to individually with each union.

All three collective bargaining agreements were signed; one for two of the unions. The following are the main points from these agreements:

Wage Increase

7.00% for the first year

0.23% above the Consumer Price Index (CPI) for 2016 for the second year

0.50% above the CPI for 2017 for the third year

Strengthening Healthcare and Education

Increased coverage for miscellaneous expenses under the healthcare policy

Increased coverage for expenses and number of college scholarships

We also increased the amount of the loan for house purchases and the installment periods to pay them back.

It should be noted that no employee benefits were reduced or eliminated.

The agreements favor those who are within the scope of application, that is, 3,724 (76%) of the 4,853 workers at the company. The beneficiaries include the members of Sintradem because, although this association was not part of the negotiations, their members either belong to one of the other unions or they benefitted from one of the collective bargaining agreements.

Constant Communication

“The company meets at least once a month with each of the unions, not including special or individual meetings with union leaders. We have constant communications,” said Ricardo Urbina Aroca, Vice President of Human Resources. Additionally, regular briefing sessions are held with all of the company’s workers.

Drummond Ltd., through Urbina, has expressed to the unions and to all of its workers its appreciation for having participated in this negotiation process with an open mind and a constructive attitude, which was critical to reaching a comprehensive agreement that promotes the development and growth of the country.

www.drummondltd.com

9

Current News

Regional Autonomous and Sustainable Development Corporations

Visited the Pribbenow Mine

The Regional Corporations (in charge of overseeing environmental compliance and performance) have recognized the hard work that Drummond has done to mitigate its impact on the ecosystem and its efforts to protect the environment.

A

s part of its communication program with the communities in the mining area of influence and the local and national authorities, Drummond Ltd. welcomed the visit of the Regional Autonomous Corporation of Cesar (CORPOCESAR) and 15 other corporations from the Association of Autonomous Corporations (ASOCARS) at the Pribbenow facilities in La Loma, Cesar.

The corporations from other departments around the country such as Chocó, Caldas, Santander, Bogotá, Oriente Amazónico, San Andrés Islas, La Guajira and Tolima came to Cesar to attend the XI Meeting of the Secretaries of the Boards of Directors of Regional Autonomous and Sustainable Development corporations.

10

www.drummondltd.com

Attendees had the opportunity to visit the lookout sites (Paujil, Ramp 7 and Load Out) where they could observe the operating processes that take place within Drummond’s mines.

During the tour, the visitors heard talks by the administrative and operations teams about the coal extraction and production process and the forestry compensation, flora and fauna relocation and environmental replanting projects that the company is carrying out, which are signs of the company’s strong social commitment to the department and the country.

“What we’re seeing here at Drummond’s mine is fantastic. From our perspective as environmentalists, we know the environmental risks. However, I recognize that the company is

The forestry compensation, flora and fauna relocation and environmental replanting projects that the company is carrying out are signs of the company’s strong social commitment to the department and the country.

doing good work and is managing to mitigate the impact that it has on the ecosystem in a positive and effective way. For that reason, we should give the company a round of applause because it is contributing to job creation and promoting care for the environment,” said Lilia Dávila, Executive Secretary of the Coralina Corporation from the Island of San Andrés.

Raúl Suárez Peña, Deputy Director of Environmental Management for CORPOCESAR, and who also handles compensation issues, expressed surprise at the company’s hard work in support of the environment. “I’ve been visiting the mine for 20 years and there are a lot of things that surprise me because the changes have been evident in order to benefit the environment.

Significant progress has been made by Drummond during these two decades. Also, I must admit that, out of all of the companies, the one that has done the best in copying my environmental compensation model has been Drummond.

Without a doubt, Drummond has been the best student,” he said.

This work shows the clear, effective and responsible management by the company for the benefit of the natural ecosystems and their care over time.

emphasis on environmental issues, and they should continue to do so. I’m sure that if we all do our part to mitigate the impacts, we can reduce them,” said Claireth Mejía, Executive Secretary of the Regional Autonomous Corporation of Cesar.

“This is the first time that I’ve visited, and I think it’s a great complex and a very large project. I think that the knowledge and the lessons learned have been very fruitful because they place great

With these visits, Drummond Ltd. continues to reaffirm its commitment to Colombia and to developing responsible mining that generates progress.

This work shows the clear, effective and responsible management by the company for the benefit of the natural ecosystems and their care over time.

www.drummondltd.com

11

In our Operation

Coal Wetting,

a Mechanism to Protect the Environment Working to mitigate environmental impacts and health risks to our workers and communities of influence is a cornerstone of the company’s operations. For this reason, we use different control mechanisms that allow us to ensure that each activity performed, both in the Mine and at the Port, meets the highest standards of safety and quality.

O

ne of these mechanisms is wetting and compacting coal in the areas for loading and unloading the material, an operation that is carried out in order to prevent emissions of particulate matter (dust) and possible mineral spills while it is transferred between the mine and the port. This task is handled by the Environmental area and is carried out in coordination with the Coal Department.

How does this mechanism work?

The coal loading silos or points, also known as Load Outs, are located at both the Pribbenow and El Descanso mines. They have irrigation systems using water spray nozzles that move in different directions. They atomize the liquid to form a cloud of moisture that captures and settles any possible particulate matter that may be emitted while filling the train cars that move the mineral, preventing it from being dispersed into the air by the wind.

12

www.drummondltd.com

The spray nozzles also perform the function of wetting the inside and outside of the cars.

In this way, the mineral is compacted inside, thus reducing the possibility of spilling the coal that may be attached to the outer walls of the cars. The idea is that the cars leave the mine completely clean.

To complement the process of mitigating the emissions of particulate matter in these areas of the operation, coal loading is carried out below the cars’ maximum filling capacity. This minimizes the possibility that the action of the wind and the movement of the train could cause coal spills during its journey.

According to engineer Alexander Contreras, who is in charge of Drummond’s air monitoring systems, the wetting or irrigation systems make it possible to mitigate approximately 80% of the particulate matter. These figures have been

corroborated by the studies and monitoring performed constantly by Ferrocarriles del Norte de Colombia, FENOCO, the operator of the railroad along which the coal is transported to the port.

The measurements are taken by FENOCO using the 12 air monitoring stations located along the track. The filters used to take the measurements have shown that, of all of the material captured by the devices, only 0.1% was from mineral coal, that is, the mineral that leaves the mine.

It is important to remember that the filers collect all types of emissions, including coal from other sources, including, among others, wood burning and forest fires. “This is a very low figure considering the amount of coal that we transport. There are 50 tons per car, on trains with 150 cars,� said Contreras.

We Protect Our Water Resources Water is essential for performing the wetting operations.

Therefore, as part of its environmental impact mitigation and control plans, Drummond has rainwater storage systems to carry out these activities.

Contreras says that the pools, as the storage systems are known, collect rainwater during the months from April to December. These resources are enough to perform the watering operations, even during the dry months that occur at the beginning of the year.

So that the water resources are used efficiently, the company ensures that the watering program provides, in advance, for the areas to be watered, the fluid requirements, the uptake sources and the frequency of application. By doing so, the operation is one hundred percent environmental responsible and is aligned with international best practices.

www.drummondltd.com

13

In our Operation

We Support a

Tremendous Operation From the Support Department, we work to meet the various service needs of our employees and contractors, always looking out for their comfort and satisfaction.

B

ecause of its enormous size, Drummond’s operations, both at the Port and in the Mine, require different supporting areas that ensure that the coal production, from start to finish, is executed without any setbacks and in accordance with all of the standards established by the company.

No matter what the responsibility, all of these areas are of fundamental importance to the inner workings of this huge operation, even if many of them are not directly involved in the production activities.

For example, the Support Department, also known as Life Support, is responsible for supervising and auditing the contracts and services for the hourly and salaried employees. This is related to activities such as food services, housing, the maintenance of offices, meeting rooms, restrooms and common areas, laundry, general cleaning, ice making, gardening, installation of portable toilets, the administration of the housing areas inside the facilities, and coordinating and serving corporate events for Management and the President.

According to Gustavo Orozco, Camp Director for the mining operations, the Support Department controls and ensures that each of the contracted companies provide these services, strictly comply with the activities and functions for which they were contracted. In this way they ensure the well-being, approval and satisfaction of all employees during their stay in the camp areas and their work shifts.

This area is also responsible for coordinating the requests made by the company with each of the companies providing these services to provide the

14

www.drummondltd.com

proper treatment, implementation and solutions for any activities, events, changes and contingencies that may arise.

An Enormous Task Based on the nature of our operations, which are carried out 24 hours a day, 365 days a year, the service needs that arise at the Pribbenow and El Descanso mines and in the transportation areas (railroad and port) require a large team that is attentive and ready to provide solutions to each of them.

For the Mine operations, this task is the responsibility of the Life Support group, made up of 15 workers. At the Port, the team consists of four employees.

At the Mine, they are responsible for monitoring and supervising the work of at least 486 contractors per shift who provide support services, an enormous task considering that in the hourly employee operations, 1,100 people are served during the day and another 1,000 at night. The situation is similar at the Port, where approximately 600 people are served each day.

Committed to Our Work The Support Department seeks to constantly implement new projects which are aimed at improving the conditions of the company’s facilities and the services provided to employees and contractors. According to Ricardo Luna, Senior Camp Supervisor at Puerto Drummond, these actions ensure timely, safe and high-quality service in a healthy and comfortable work environment.

www.drummondltd.com

15

In our Operation

Myths and Realities

of Hydraulic Stimulation

Hydraulic stimulation or fracturing is a practice used by the hydrocarbon industry to increase oil and gas extraction from underground. It is a procedure that has been performed for several decades with excellent results and minimal impact. However, unfamiliarity with the process has created several myths and it is important to clear them up. These are some of the most common.

1

Myth: Large quantities of water are used

2

Reality: The wells do not contaminate bodies of water when isolation of the stimulated areas and the shallow aquifers is ensured, so that there is no hydraulic interconnection between them. In the specific case of the Caporo North Development Area, and as set out in the environmental license, there will be no direct discharges of wastewater into bodies of surface water.

Reality: A well is stimulated, on average, in 5 stages that require 15,000 barrels of water, equivalent to 2,385,000 liters per well (for 3 to 5 days one time during their productive lives).

In agriculture, for example, a one-hectare rice crop requires 12,300,000 liters of water (in approximately 110 days).

3

Myth: Large quantities of hazardous chemicals are used

4

Reality: More than 98.5% of the volume of stimulation fluid is water. Only 1.5% of the stimulation fluid is made up of 11 chemical additives, of which only two of them could be classified as hazardous material if not handled properly.

5

16

www.drummondltd.com

Myth: It significantly alters the intensity of greenhouse gases Reality: This is false. For example, in our Caporo North Development Area project, we developed an atmospheric emissions model using AERMOD View software, which took into account: 1) the current state of air quality without the project, and 2) air quality with the project in the most critical emissions conditions.

By comparing the results, we found that the emissions generated by the project are far less than what would exceed the maximum levels established in the existing environmental regulations.

Myth: Hydraulic stimulation causes earthquakes Reality: To date, a relationship between hydraulic stimulation and the creation of earthquakes has not been established anywhere in the world. This is reflected in the findings of studies on specific cases in the U.S., Canada and the U.K. Hydraulic stimulation consists of injecting fluids for a short period of time (two to three hours), during which the energy released does not have the capacity to produce seismic events that can be felt on the surface and, therefore, it is unlikely that these events, of very low magnitudes, could trigger a ground movement of great magnitude.

Myth: Hydraulic stimulation can contaminate bodies of water

6

Myth: The practice is prohibited in almost all countries Reality: Officially, it is prohibited only in France and Bulgaria, which are not prospective countries for hydrocarbon production. Other countries such as Germany, Czech Republic, Scotland, Holland and Northern Ireland have voted on a temporary moratorium until their environmental impact is established.

In Brief

We Promote the Development of the Communities Generating Employment Opportunities in Boquerón

We are Promoting Education in Our Areas of Influence

Thanks to the alliance between the Mayor of La Jagua de Ibirico, Drummond Ltd. and Prodeco, 80 families from the village of Boquerón benefit from the project to implement production units. This alliance will allow the community to receive technical assistance on implementing business units, building businesses, workshops and training sessions, as well as the start of the income-producing processes by providing hens for egg production and pigs for fattening or breeding.

With 14 new scholarships for underprivileged youth, Drummond Ltd. continues to support education in the Departments of Cesar and Magdalena. The scholarships, which cover the entire degree´s costs plus a monthly living stipend, have benefitted 89 young people. In this way, the company remains committed to the next generation’s studies and the betterment of society.

Committed to the Safety of the Magdalena In order to support and facilitate the safety efforts and strengthen the “Magdalena Goes Back to the Country” program, Drummond Ltd. provided the First Army Division with five 650-cylinder and thirteen 125-cylinder motorcycles.

At the official presentation of the 18 vehicles, the President of the company, José Miguel Linares, recognized the work that the Army does on a daily basis with perseverance, dedication and discipline. “We have helped to position the country as a major coal supplier at the global level, generating thousands of jobs, economic and social development. This has been possible thanks to the National Army of Colombia,” he said.

Committed to Training the Fishing Communities In order to comply with the fishing activities management program, proposed in the company’s Social and Environmental Management Plan, Drummond Ltd. carried out a series of trainings aimed at the fishermen of Ciénaga and the Airport and Don Jaca areas of Santa Marta. The initiative was developed in partnership with the General Maritime Authority (DIMAR) and the Coast Guard Station of Santa Marta. After the training sessions, 21 participants were certified in minor fiberglass repairs and basic engine operation.

Trees for a Better Environment Drummond Ltd. delivered 400 trees from the company’s tree nursery to residents of the El Prado neighborhood and to the Valentín Manjarrez School in La Loma, Cesar. The organization also provides training on tree planting, environmental awareness and maintenance and monitoring to ensure that the different species that are planted -- mango, poison ash, cedar and oak trees -- are able to grow and benefit the populations where they are located.

www.drummondltd.com

17

CSR

A Place where Children Learn Through Play For Drummond, its commitment to educational programs is the cornerstone of its social responsibility. This is why it supports various initiatives located in its area of influence. Here is one example.

T

he El Juguete Childhood Development Center (CDC) was created in 2012 for the purpose of providing comprehensive care for children from six months to four years old from the municipality of Agustín Codazzi, Cesar.

Klelia Macías, Coordinator of the Development Center, spoke with Revista Drummond about the importance of the institution in the early education of the municipality’s most vulnerable children and its impact on strengthening its residents’ family ties.

The Center, which currently serves 236 children, especially in the neighborhoods of El Estadio, El Juguete, 15 de Noviembre and El Socorro, among others, has received support from Drummond since 2014 through donations of property, teaching and learning materials, in addition to on-site repairs for the center.

Revista Drummond: What is included in the comprehensive education that the Center provides the children?

Klelia Macías: The children receive early education in specialized classrooms, divided by areas, including logic, library, art, science, gym, music, nursery, characters and role-playing; there are 10 classrooms in all.

18

www.drummondltd.com

The Center offers teaching in which role-playing and recyclable and reusable materials are an essential part of learning.

Additionally, the Center offers children, as part of its comprehensive assistance, balanced nutrition consisting of breakfast, two snacks and lunch, a nutritional plan that meets the specifications required by the Colombian Family Welfare Institute, ICBF in Spanish, and is constantly checked by our nutritionist.

R. D.: How many people work at the Center?

K. M.: Currently at the Center there are 30 people including teachers, teaching assistants, food handlers, service assistants, a bookkeeper, nutritionist, psychologist and coordinator, all hired directly [by the Center].

R. D.: How does Drummond support the work that the Center does within the community?

K. M.: As part of its community relations program, Drummond visited the Center’s facilities and confirmed the importance of the institution for the community, which is why it decided to support the initiative. The company made a donation of property, teaching and learning materials with tremendous educational value that has allowed the children to work with better educational tools. It also participated in different on-site repairs to the institution’s infrastructure. Now we proudly show off Drummond’s institutional colors. The company´s contribution has not just benefited the Center.

In reality, it has positively affected the entire community served by the organization.

The Childhood Development Center (CDC) offers early education in specialized classrooms, divided by areas, including logic, library, art, science, gym, music, nursery, characters and role-playing.

R. D.: How does the Center contribute to strengthening the social fabric of the community?

K. M.: In addition to offering a space that is equipped with all of the specifications needed to provide comprehensive services to the children and engage their families, the Center offers its facilities for workshops aimed at the community on different arts and crafts such as theater, shoemaking and food handling, among others. The training is carried out by the SENA in coordination with the local mayor’s office. These workshops allow residents of the municipality to have an opportunity to learn about and perform economic activities that increases their income potential.

R. D.: What are the Center’s major achievements from these four years of work?

K. M.: During these four years, we have graduated more than 200 children who have entered the local public schools (IED, in Spanish) very well prepared, and have achieved excellent academic results.

R. D.: What are the Center’s challenges in the short and medium-term?

K. M.: To continue to strengthen our teachers’ training. We are planning to serve more children from the municipality in optimal spaces that allow them to develop their sports, artistic and intellectual abilities. We are currently working on expanding our dining area in coordination with the local mayor’s office, and we hope that it will be a reality very soon.

www.drummondltd.com

19

Special 10K

We Sponsored the Sporting Spirit of the

Santa Marta 10K

F

or the third year in a row, Drummond sponsored the Santa Marta 10K - Your City Runs, one of the department’s most important sporting events, led by The National Federation of Merchants, FENALCO. These are some of the best moments that took place on June 5th.

This time, the event was attended by approximately

1,800

runners

including children, young people and adults from Santa Marta and other regions of the country such as CiĂŠnaga, Barranquilla, Valledupar and BogotĂĄ.

The sporting event also included a

5K format, an opportunity designed to bring together family and friends.

20

www.drummondltd.com

Our Talent

Dreams that Only Come True

Through Opportunity

By Rafael Arrieta Fernández Ship-loading Operations

I

n 2005, when I was in my 5th semester of Systems Engineering, I had the opportunity to participate in a project at Drummond Ltd.

This project selected young people from the region to train and make them future employees of the company. My adventure began in April 2005, when we spent a year in Cartagena completing a Deckhand Machinist course in the Nautical Center.

In May 2006, we returned to Drummond to complete the production part of the learning process, which lasted six months.

That was the end of a successful new stage in which I was evaluated by all of my immediate bosses and peers in October 2006. In December of the same year, Drummond again included us in a project that took us back to the walled city to gain more specialization at a different technological level in Commercial Maritime Transportation (Deck Officer), an experience that lasted two years in the elective stage and six more months in the production stage. Here we learned in greater detail about life as sailors and how to move through the sea without losing our way.

After completing this last project, in October 2008, we became part of the Drummond family. Since then, eight years have passed with the company. I had the opportunity to become Boat Captain in 2011, which included following the safety rules and learning about the area. Today I am part of the transformation of the Port and the team of workers on the direct loading pier, where I have been for a year and a half.

That was when my life took a 180° turn, stepping onto solid ground and having the opportunity to be near the ships.

I thank God that I am surrounded by excellent coworkers and bosses who have given me support and experience in this

new stage, selflessly sharing all of their knowledge, so I can keep working hard every day.

This is possible with effort, hard work and humility, since at this company it is important to be a person with the right attitude and confidence.

The one who arrives first is not the one going the fastest, but rather the one who knows where he’s going.

As a human being, I consider myself to be a person who dares to succeed and to achieve my goals. My personal achievements go hand in hand with love, happiness and prosperity.

Today and every day, I give thanks to God for the privilege of being part of this company and for my family, which is what I love most in life. They are the reason that I wake up every morning; to give them a better future. Every day I am grateful to my coworkers, to the company and my friends for all the support I’ve received.

www.drummondltd.com

21

Occupational Health and Industrial Safety

Operational Excellence

in Our Working Conditions Program to Control Health Risks in Machinery Cabins At Drummond Ltd., human capital is the company’s most valuable resource. Therefore, maintaining and protecting employees’ health and lives is a priority and a challenge for the operations.

A

s part of this mission, the Occupational Health and Industrial Safety departments promote and lead prevention programs aimed at strengthening the self-care culture, in an effort to reduce the likelihood of occurrence of events that might compromise health.

This initiative has made it possible to make adjustments to nearly 95% of the cabins of the heavy equipment used in the operations, which covers approximately 45% of all of the company’s employees.

22

One of the most important success stories that the company has had in recent years related to controlling exposure to the main health risk factors (noise, particulate matter and mechanical vibrations transmitted to the entire body) is the “Cabin Conditions Improvement Program.” It is an intervention model developed with the goal of minimizing the potential risk for operators of the company’s heavy equipment of suffering from respiratory, hearing and musculoskeletal conditions. This initiative has made it possible to make adjustments to nearly 95% of the cabins of the heavy equipment used in the operations, which covers approximately 45% of all of the company’s employees.

The program is led by the Occupational Health department, in coordination with the Maintenance and Production departments, and it is carried out in three phases.

www.drummondltd.com

In the first phase, inspections are conducted to identify structural problems in the equipment cabin, such as the quality of the seals, the positive pressure and filtration systems, the operation of the air conditioning systems, the seat cushioning and anchoring systems, and other variables that can be used to obtain a comprehensive diagnosis for establishing effective controls. Additionally, evaluations are performed on the magnitude of the concentration and intensity levels of the agent in question (noise, particulate matter, mechanical vibrations) to determine whether they are within the allowable limits (TLV) and thereby the necessary adjustments are prioritized. These inspections and assessments are performed on the equipment before entering preventive maintenance, which must be performed every 2,000 hours for the auxiliary equipment fleet and every 1,000 hours for the truck fleet. They are also performed when an operator of any piece of equipment, through their supervisor, reports that the cabin that they use shows some kind of anomaly.

In the second phase, based on the diagnostic completed by the Occupational Health division, the Maintenance department establishes an intervention plan to correct the deviations identified in the cabins.

commitment by various companies around the country, which may or may not be enrolled with this occupational risk manager, and to develop practical solutions to the problems that they face every day related to occupational accidents, occupational diseases and their impact on labor productivity.

In 2015, as part of the progress made in this area, the American Industrial Hygiene Association (AIHA) awarded a prize to the Centro para la Prevención de Riesgos Profesionales (CRP) and the University of Central Missouri for the best success story for the research project “Value of Prevention through Design (PtD) Interventions in an Open Pit Coal Mine, Drummond Ltd. Colombia.”

At the end of 2014, Drummond Ltd. ranked first in the Business Leaders in Prevention category for the Colmena Seguros Leaders in Prevention Award.

In the third and final phase, the integrative approach ends with a post-intervention analysis through inspections and quantitative measurements of potential risk levels, which are compared to the pre-intervention results, making it possible to ensure the controls that were implemented and guarantee excellent operational work conditions, achieving the following short and medium term benefits: •

Reduction in the incidence of respiratory, hearing and musculoskeletal diseases

•

Savings on welfare and economic benefits due to temporary and permanent (partial) disability

•

Increased labor productivity

•

Reduction in medical observation costs (secondary prevention)

•

Increased worker comfort and morale

At the end of 2014, Drummond Ltd. ranked first in the Business Leaders in Prevention category for the Colmena Seguros Leaders in Prevention Award, which seeks to recognize the effort and

The intervention model that was used for the research project was based on the “Cabin Conditions Improvement Program,” with a sample applied to the bulldozers as part of the risk control strategies.

In this sense, “the reduction in the risk levels for these agents through the implementation of control measures in reducing the magnitude of exposures were the aspects that led the judges from 4 technical-scientific committees from the AIHA to regard this work as the one with the best score out of a total of 60 success stories that were selected and presented, from 200 that were initially nominated for this event,” Dr. José Guerra Añez, Director of the Occupational Health Department at Drummond Ltd. and coordinator of this project, said at the time.

Recently, as part of the 2016 American Industrial Hygiene Conference and Exposition this experience was presented at a talk entitled “The Value of Prevention through Design (PtD) Interventions in an Open Pit Coal Mine (The Value of Controls in Drummond Ltd. Colombia),” which was well-attended by health professionals and occupational hygienists from around the world, who emphasized the importance of these intervention measures and the strategic approach to making working environments healthier.

www.drummondltd.com

23

Seguridad

REVISTA

www.drummondltd.com @DrummondLtdCo 24

www.drummondltd.com